T-Mobile UK and Orange are to merge - becoming the UK's biggest mobile phone firm with 28.4 million customers.
The deal between Orange-owner France Telecom and Deutsche Telekom's T-Mobile UK will create a business with sales of 9.4bn euros (£8.2bn; $13.5bn).
The merged firm will have about 37% of the UK mobile market - overtaking the current leader, Telefonica's O2.
It is the second large corporate deal in two days, after Kraft Food's £10.2bn takeover proposal for Cadbury.
'Efficiencies'
Orange and T-Mobile said their deal - due to be signed by November - would "bring substantial benefits to UK customers", and promised expanded network coverage, better network quality and improved customer services.
Both brands will remain separate for the first 18 months after the deal is completed while branding is reviewed.
Orange chief executive Tom Alexander will lead the new company, with T-Mobile's UK boss Richard Moat as chief operating officer.
Orange employs 12,500 people in the UK, while T-Mobile has UK workforce of 6,500.
A spokeswoman confirmed there would be "efficiencies" that could be made across both businesses - but said it was too early to give details of any impact on staff.
Integrating the business will cost between £600m and £800m, the firms said. This bill would include decommissioning mobile phone masts, cutting back the network of stores and streamlining other operations. Savings should reach about £445m a year by 2014, they added.
Avoiding writedowns
Deutsche Telekom said earlier this year that it was considering its options for its UK business - which has struggled to win customers in the highly competitive market - which sees five operators and several smaller players compete.
Observers say that a joint venture allows the German firm to avoid the write downs it could face if forced to sell T-Mobile UK for less than it hoped.
Meanwhile, for France Telecom, the deal it is a way to strengthen its position in the UK market without paying cash or taking on vastly more debt.
T-Mobile is currently the fourth-largest mobile operator in the UK, with a 15% share of the market. O2 has a 27% share, followed by Vodafone (25%) and Orange (22%).
BBC NEWS | Business | T-Mobile UK and Orange to merge
The deal between Orange-owner France Telecom and Deutsche Telekom's T-Mobile UK will create a business with sales of 9.4bn euros (£8.2bn; $13.5bn).
The merged firm will have about 37% of the UK mobile market - overtaking the current leader, Telefonica's O2.
It is the second large corporate deal in two days, after Kraft Food's £10.2bn takeover proposal for Cadbury.
'Efficiencies'
Orange and T-Mobile said their deal - due to be signed by November - would "bring substantial benefits to UK customers", and promised expanded network coverage, better network quality and improved customer services.
Both brands will remain separate for the first 18 months after the deal is completed while branding is reviewed.
Orange chief executive Tom Alexander will lead the new company, with T-Mobile's UK boss Richard Moat as chief operating officer.
Orange employs 12,500 people in the UK, while T-Mobile has UK workforce of 6,500.
A spokeswoman confirmed there would be "efficiencies" that could be made across both businesses - but said it was too early to give details of any impact on staff.
Integrating the business will cost between £600m and £800m, the firms said. This bill would include decommissioning mobile phone masts, cutting back the network of stores and streamlining other operations. Savings should reach about £445m a year by 2014, they added.
Avoiding writedowns
Deutsche Telekom said earlier this year that it was considering its options for its UK business - which has struggled to win customers in the highly competitive market - which sees five operators and several smaller players compete.
Observers say that a joint venture allows the German firm to avoid the write downs it could face if forced to sell T-Mobile UK for less than it hoped.
Meanwhile, for France Telecom, the deal it is a way to strengthen its position in the UK market without paying cash or taking on vastly more debt.
T-Mobile is currently the fourth-largest mobile operator in the UK, with a 15% share of the market. O2 has a 27% share, followed by Vodafone (25%) and Orange (22%).
BBC NEWS | Business | T-Mobile UK and Orange to merge
